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6.1. Main Rules Governing the Determination of Taxable Income

The corporate taxpayer must file a corporate income tax return each year based on its financial statement (Art. 7 DS 24051) with the specific tax adjustments required with respect to deductions, depreciations, attribution of income, etc...

Supporting documents such asinvoices, receipts and the payroll register on the basis of which net taxable income is calculated must be preserved from 5 to 10 years; in the event of an audit, they must be submitted to the tax administration.

In order to assess the net tax base, “Gross Profit” (income less cost of goods sold and services rendered) is reduced by expenses (deductions) needed to obtain income and preserve the source.

Pursuant to the territoriality principle, the tax applies both to resident and non-resident companies, provided that a nexus existsbetween the earnings and the Bolivian territory. The Bolivian corporate income tax is a global tax system (taxable base is determined by aggregating the income of all sources and categories of the taxpayer).

The most significant type of exempt income is dividends paid to Bolivian residents. Foreign residents pay a withholding tax of 12.5%.